Judge rules in favor of Pandora in important licensing case

Brian McAndrews, former head of aQuantive and Pandora’s new CEO got some good news today from the company’s law firm: it looks like the service won’t be losing music any time soon.

According to a report by Reuters, Judge Denise Cote, who has also presided over U.S. v. Apple, has issued a summary judgment that a licensing agreement Pandora made in 2005 with the American Society of Composers, Authors and Publishers (ASCAP) will continue to apply through 2015 while the two sides fight to determine licensing fees going forward. That means music controlled by rightsholders who wish to withdraw from the ASCAP agreement will remain on Pandora, at least for now.

The battle between ASCAP and Pandora doesn’t stop here, though. Now, the two sides will go to trial, and Cote will set the licensing rates for Pandora’s next contract with ASCAP, thanks to a precedent set in 1941 that gives the U.S. District Court of New York the ability to set licensing rates.

This case is important for streaming music services, which rely on groups like ASCAP and major labels to set licensing prices that continue to allow them to do business. Pandora contends that ASCAP is asking for too much money in its licensing talks, especially as major labels like EMI have removed their catalogs from ASCAP’s hoard in the interest of negotiating directly with streaming music providers like Pandora.

The rate that Cote sets may become something of a benchmark for other licensing contracts between rightsholders and other streaming services, like Rhapsody, Spotify and Apple’s newly-released iTunes Radio.

Blair Hanley Frank is GeekWire's Bay Area Correspondent. He has also worked for Macworld, PCWorld and TechHive. Follow him on Twitter @belril and email him at blair@geekwire.com.

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